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Popular DeFi project 1inch Network is planning to release a new stablecoin pegged to the U.S. dollar in partnership with the ICHI platform, 1inch said in a blog post on 1 July.

According to the announcement, 1inch will use ICHI’s Decentralized Monetary Authority (DMA) to create the one1INCH stablecoin, which will be “minted with a blend” of the 1INCH token and Centre‚Äôs USD Coin (USDC). The dollar-pegged stablecoin will be used as a medium of exchange for paying operation expenses, provide liquidity, and distribute rewards. The co-founder of the 1inch Network, Sergej Kunz, said in a statement:

“The one1INCH stablecoin can grow into an economic game changer. At scale, its treasury can drive value back to 1inch DeFi operations because it is minted and over-collateralized with 1INCH tokens.”

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In order to increase the demand for the 1INCH token, the 1inch Foundation plans to contribute $100,000 worth of the token as collateral for one1INCH, which ICHI will match, so the stablecoin is minted using 20% 1INCH and 80% USDC. The new stablecoin can be minted and redeemed for a set value of $1.

ICHI’s DMA was designed to drive value back into crypto communities, by enabling them to mint new stablecoins through a mix of fiat-backed tokens and the community’s native token. The platform has positioned ICHI as the world’s first protocol that enables DeFi communities to create decentralized money-lending services.

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